Article 50: Brexit must be turned into an opportunity for UK businesses

WITH Article 50 kicking off Brexit proceedings, the UK government and businesses must work hard to turn uncertainty into an opportunity, firms and industry groups said on Tuesday.

A lack of clarity around the UK’s divorce from the EU could prevent companies from securing the finance they need to expand, warned peer-to-peer lender ArchOver.

“With uncertainty comes a decline in investment and the threat of growth halting altogether,” said the platform’s chief executive Angus Dent.

“SMEs will find this an especially daunting period. If investment and lending levels drop following Article 50, tomorrow’s entrepreneurs will remain in the shadows, lacking the cash to drive their businesses and our economy forward.”

Research from Smith & Williamson showed that both the immediate confidence and the longer-term economic outlook of small businesses looking to scale up were hit hard following the Brexit referendum.

The proportion of SMEs who believe the current government is supportive of private enterprise dropped by 20 per cent in the last six months to 49 per cent, according to a survey carried out by the accountancy firm.

Alternative lenders are thus charged with the key responsibility of heading off a business funding dearth over the next few months, argued Dent.

“We must all treat Brexit as an opportunity,” he said. “SMEs must use quick access to P2P funds to fire up their businesses – and avoid being dragged down by uncertainty.

“We must let them know there’s help available beyond the nervous banking sector. Through this period of change, P2P lending platforms can assist even more than before.”

But this also means the government must play its part to ensure that the UK builds the strongest digital economy in the world despite Brexit, fintech trade body Innovate Finance said.

“The UK fintech sector relies on global investment and world class talent,” said the organisation. “The triggering of Article 50 may pose challenges to these fundamentals.

“The government must ensure we continue to develop the most progressive fintech ecosystem in the world and attract and develop the best global talent, the key ingredients to attracting quality investors.”

On a positive note, a vast majority of companies nationwide have already prepared for cliff-edge economic swings, according to accountancy firm KPMG.

“It’s clear the majority of chief executives have Brexit plans and are already taking action,” said the firm’s head of Brexit Karen Briggs.

“There is very little complacency around, now the spectre of a cliff edge situation has become a realistic scenario. People know the potential impact is huge and they need to act now.

“Firms are calculating how to make Brexit, and the disruption it will cause, into a business opportunity – not just a managed risk.”

Theresa May formally kicked off Brexit proceedings with the EU on Tuesday by triggering Article 50.

The triggering of the exit clause means the UK has two years to negotiate its separation from the 28-nation bloc, including a thorny divorce bill that could hover around £40bn to £60bn in liabilities, as reported in the last few months.

Trade agreements are also at stake, although they may only be discussed and finalised after the end of the two-year term.